Netflix Wants The FCC To Do Something About Pesky Data Caps

For you to watch Netflix, you need access to broadband data. To watch lots of future-ready 4K Netflix, you may need access to lots of data. And if you’re one of the millions of Americans subject to data caps at home, well, that might be a problem. So Netflix wants the FCC to do something about it.

That’s the gist of a comment (PDF) Netflix submitted to the FCC this week.

Netflix submitted the letter to an existing FCC proceeding that we wrote about last year: the annual broadband report.

The FCC issues an annual report on the state of broadband deployment in the U.S., but voted last year to consider some new questions for the next edition, when it comes out. The proceeding it kicked off, called a Notice of Inquiry, asked the following questions:

  • Should the report count mobile broadband as well as terrestrial (wired) broadband?
  • If yes, what speed threshold is the baseline for mobile broadband to qualify?
  • Should the report count fixed satellite broadband?
  • Should the report include network latency, connection consistency, pricing structures, privacy issues, or bandwidth caps as factors?

The proceeding is now open for public comment. And as for that last point, Netflix’s argument is a resounding “yes.”

Data caps and usage-based pricing, Netflix says, “discourage a customer’s consumption of broadband and may impede the ability of some households to watch Internet television in a manner and amount that they would like.”

In other words, if you’re going to get charged $30 to go over your data this month, you may just decide you don’t need to watch Jessica Jones or Orange Is The New Black after all. And that’s bad for Netflix’s business.

“For this reason,” Netflix continues, “the Commission should hold that data caps on fixed-line networks — and low data caps on mobile networks — may unreasonably limit Internet television viewing” and are inconsistent with the FCC’s statutory goals.

Netflix then sets out the math: the average American watches 3.4 hours of television programming — in total, of all kinds — per day. If HD Netflix uses 10 GB per 3.4 hours of viewing, and 4K Netflix uses 24 GB per 3.4 hours of viewing, then you’re in the 300-1020 GB data range every month just on your streaming TV, and not even counting your other broadband uses.

Furthermore, Netflix continues, data caps on home (fixed-line) networks “do not appear to serve a legitimate purpose: they are an ineffective management tool.” Government reports back it up, and companies like Comcast have even said as much before.

As you might guess, Netflix also hates the idea of zero-rating, that thing where companies can exempt some stuff from their data caps. Providers can “employ data caps in a way that explicitly discriminates in favor of one content source or another,” Netflix argues, which limits consumer choice. “By imposing limits only on certain video services, providers effectively increase the cost that consumers must pay to access those services while making exempt content comparatively cheaper, steering consumers toward the exempted services.”

None of this is theoretical for Netflix: the company drew negative attention earlier this year when journalists called it out for throttling its own data streams to mobile users. Netflix’s reasoning? All those Verizon and AT&T customers were subject to data caps that high-quality video would quickly run smack into.

As for what the FCC may or could do with Netflix’s ask, that’s a little more complicated. The Broadband Report officially evaluates “the deployment of advanced telecommunications capability” in the U.S. When the Commission adopted the 2014 report in January, 2015, it voted that you need 25 Mbps speeds to hit “advanced capability.” That redefined “broadband” in regulatory terms, but not in practical day-to-day ones for most folks.

If the Commission votes next year that data caps are something it should take into consideration in future reports, that won’t kick off a sea change so much as it will kick off several more cycles of regulatory discussion about what to do.